In gene case, SCOTUS to confront Federal Circuit on patentability

By Alison Frankel

December 3, 2012

One of the great judicial dialogues of the last few years has been the back-and-forth between the U.S. Supreme Court and the Federal Circuit Court of Appeals over what’s patentable. The roots of the debate predate the creation of the Federal Circuit in 1982, but valuable software and biotech patents have lent urgency to the issue — and divergent views by the Supreme Court and the Federal Circuit on patentability standards have led to a series of rulings in which the justices contradict the appeals court but the Federal Circuit refuses to take the hint and continues to go its own way. The conflict has created so much uncertainty that over the summer two petitions for en banc review, including one in a case remanded by the Supreme Court, begged the Federal Circuit to resolve its own internal split on how much deference to give the Supreme Court.

The Federal Circuit was at its most defiant last August, when Judges Alan Lourie and Kimberly Moore once again ruled that an isolated piece of human genetic code can be patented. The case, which involves Myriad’s patents on a gene mutation that denotes a tendency to develop breast and ovarian cancer, had been sent back to the appeals court by the Supreme Court for re-evaluation in light of the justices’ reminder in Mayo v. Prometheus Laboratories that naturally occurring phenomena are not patentable. But Lourie and Moore gave short shrift to the Supreme Court’s Mayo ruling. Lourie’s opinion for the majority and Moore’s concurrence basically repeated their previous findings on Myriad’s gene patents, with an extra paragraph or two about why Mayo isn’t applicable or is outweighed by the longstanding U.S. Patent and Trademark Office policy on granting patents on isolated g e nes. (Judge Curtis Bryson dissented with last summer’s Myriad decision, just as he did the first time the case was decided.) After the Federal Circuit’s decision, Daniel Ravicher of the Public Patent Foundation, who is co-counsel to the gene patent opponents, told me that the ruling was the latest shot in the ongoing patentability tennis match between the appeals court and the justices.

The Supreme Court has now grabbed the ball in what should be the last game of the match. On Friday, the court granted a petition for certiorari filed by Public Patent and the American Civil Liberties Union, which asked the justice to answer, directly and with clarity, whether human genes or isolated pieces of genetic code can be patented as the product of man-made invention or are unpatentable because they are found in nature. “Despite Myriad’s claim that the law applied by the(Federal) Circuit is settled, it is clear that the circuit created new legal standards in upholding these patents, while simultaneously rejecting those articulated in this court’s Section 101 (patentability) precedents,” the ACLU and Public Patent wrote in their response brief in support of cert.

If the Federal Circuit’s opinion is allowed to stand, they said, the Supreme Court would be endorsing the patentability of any natural composition removed from nature and put to another use. According to gene patent opponents, that’s explicitly contrary to the court’s 1948 ruling in Funk Brothers Seed v. Kalo and, by extension, in last year’s Mayo decision.

Myriad’s lawyers at Jones Day countered in their brief opposing cert that the breast cancer screening company’s patents aren’t on human genes but on pieces of genetic code isolated by scientists and chemically distinct, by virtue of that isolation, from what’s found in nature. The PTO has been patenting such man-made genes for decades, Myriad argued, and the 40,000 gene patents the PTO has already issued have enormously benefited science and healthcare. Myriad urged the Supreme Court to let the Federal Circuit’s two considerations of the breast cancer gene case be the final word.

By granting cert, at least four justices have indicated that they have something to add to the discussion. Ravicher of Public Patent told me Monday that gene patent opponents shouldn’t yet celebrate, though. “We’re far from over,” he said. “This was a great thing to happen, but there’s a long way to go.” At least, he said, there’s now a chance for some finality in an area where intercourt bickering isn’t helping anyone. “Smart people sometimes have the downside of not listening to one another,” he said of the back-and-forth between the Federal Circuit and the Supreme Court. “Both feel disrespected by the other. That creates tension. The law shouldn’t be this way.”

Myriad lead counsel Greg Castanias said it appears that the Supreme Court wants to eliminate uncertainty but added that he believes the court’s own precedent on what constitutes a man-made invention (in 1980′s Diamond v. Chakrabarty) and on deference to PTO policy (in the 2001 decision in J.E.M Ag Supply v. Pioneer Hi-Bred) will persuade the justices to uphold Myriad’s patents. “This is another opportunity for the Federal Circuit and the Supreme Court to explore their relationship,” he said.

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Alison Frankel updates On the Case multiple times throughout the day on WestlawNext Practitioner Insights. A founding editor of the Litigation Daily, she has covered big-ticket litigation for more than 20 years. Frankel’s work has appeared in The New York Times, Newsday, The American Lawyer and several other national publications. She is also the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.